…requires more than just good programming.

A small experiment with LinkedIn ads

LinkedIn.com (the B2B equivalent of Facebook) supports Google style pay per click ads. So I decided to run some ads for my seating planner software as an experiment. Here is a brief summary of my (very brief) experiences.

The good news

LinkedIn ads can be laser targeted. You can specify who you want to see your ad based on their job function, company, gender, age group, country and (best of all) the LinkedIn groups they belong to. I targeted 10,102 LinkedIn members who live in wealthy English speaking countries, belong to various LinkedIn groups related to event planning and have appropriate job titles. The campaign was quite painless to set up. It probably took me less than 10 minutes in total and I started getting impressions within an hour or so.

The bad news

The minimum allowed CPC (cost per click) was $2. Ouch. I know from extensive experience with Google Adwords that there is no way I can get a return on that.

The minimum allow CPM (cost per thousand impressions) was $3. If the CTR (click through rate) is around 1% (about what you might expect from Google search ads) this is $0.30 per click. Possibly profitable. If the CTR is around 0.1% (about what you might expect from Facebook ads) this is $3 per click. No better than the CPC bidding. Given that LinkedIn is more similar to Facebook than Google search, I expected the latter. I decided to spend a few dollars to find out. The results are below (click to enlarge):

So, with an average 0.17% CTR, I ended up spending $1.76 per click. Given my average transaction value and a realistic conversion rate I know that I can’t make any return on this. Also the CTR is likely to drop the more often people see the ad. So I stopped the experiment after less than 24 hours, before I wasted any more time or money. As far as I can tell (based on my own cookie tracking – LinkedIn ads don’t have their own conversion tracking) I didn’t make any sales. But that is hardly surprising given the small number of clicks.

Summary

Obviously $19.38 is a tiny amount to spend, but I think it told me what I needed to know about LinkedIn ads. Unless they reduce their CPC or CPM bid prices by an order of magnitude there is no way I can make a return. Of course, if you are selling a product where the average lifetime value of a customer is hundreds or thousands of dollars, the numbers might work out quite differently for you.

15 thoughts on “A small experiment with LinkedIn ads”

We tried LinkedIn Ads a few months ago. I let them run for longer, with the premise being “maybe its managers and team leaders that see the ads, so we’ll see a delay in response.”

We ran the ads for nearly 2 months before concluding there is now way you can make LinkedIn Ads pay for software products. I didn’t want to run them for a short amount of time and not have anything really conclusive. Yes I wasted a lot more money with LinkedIn Ads than you did :-(

I know someone that LinkedIn Ads do work for. He is a consultant and the long term value of a customer brought to him via LinkedIn in in the tens of thousands of dollars, per year. Works for him, but they need a different pricing structure for products that not “high ticket” sales.

141,715 impressions in a week, wow that’s huge. Thanks for sharing this data. I assume the impressions went so high due to targeting options. Would you share how did you build targeting for your ads? This would then help us determine if targeting have caused your impressions went high in a short period of time. If targeting could be the reason, then it would be a good option to limit your targeting filter like let’s say the geotargeting, if your target audience are from all over the world I would suggest to first try one location so as to avoid huge impressions which may cause a lower CTR.

As per Linkedin, the better CTR you have the more you get lower spending per click.

Glad to read this. I’m going to go ahead and have a try with the LinkedIn ads. My company offers web consulting and custom web design/development. New projects usually generate at least $7000 in new business.

Just wanted to write and subscribe to this post so I can come back and post my results in a few weeks.

We are about to try running ads for a company that provides Virtual Offices and Executive Suites in the United States. New clients have the potential to generate anywhere from $300 to $50 per month, so I am not certain LinkedIn ads will be the right and/or a profitable fit for the company but we shall see. That is what testing is all about. Keep you posted on our findings.

I just got done running a few test campaigns on LinkedIn as well. My outlook is the exact same. It is way too expensive unless each lead has the potential to generate substantial revenue streams over the year. My average CPC was $2.25.

We are creating a database of small businesses experiences using internet marketing services (think Adwords, Groupon, Facebook, etc.). Please share more specifics at http://www.biznextdoor.com about your experience with LinkedIn. A lot of companies we have been working with have been questioning whether LinkedIn ads are effective. We are giving away marketing dollars to companies with the most useful reviews.